Ethnic minority immigrants and their British-born descendants are still failing to enjoy career opportunities in line with their educational achievements, according to a Working Paper published today by the UCL Centre for Research & Analysis of Migration (CReAM).

The study, which is the first detailed investigation into the educational attainment and economic behaviour of Britain's ethnic minority immigrants and their children, analyses data from the British Labour Force Survey (LFS) from 1979 to 2005.

Intergenerational comparisons suggest that British-born ethnic minorities are better educated than corresponding groups of first generation immigrants - and on average better educated than their white native born peers. But this educational advantage is not translated into better employment prospects. White natives are 5.8 per cent more likely to be employed than first generation ethnic minority immigrants and 7.7 per cent more likely than British-born ethnic minority immigrants.

The study looked at the six largest non-white minority populations in Britain: Black Caribbean, Black African, Indian, Pakistani, Bangladeshi and Chinese. Results reveal in one generation the number of ethnic minority immigrants in the highest educational category has increased to 28.4 per cent from 11.3 per cent, which contrasts with an increase from 7.7 per cent to 19.8 per cent for white natives. However, there was also a significant difference in attainment across ethnic groups. While almost 50 per cent of British-born Chinese have a university degree or equivalent, only 15 per cent of British-born Black Caribbeans do.

It also found that the relative earnings position of ethnic minorities born in the UK is often masked by their high concentration in the capital where wages are higher. While the population of white British in Greater London has remained constant at 10 per cent of the total white British population, 44 per cent of the first ethnic minority immigrant generation and 46 per cent of the British-born ethnic minorities reside in the region.

In females, when regional distribution, age and educational structure were taken into consideration, what appeared to be a wage advantage of 14 per cent over British white females became a 4 per cent disadvantage for British born ethnic minority females. In males, the wage disadvantage of British-born minority males increased from 2 to 9 per cent.

The study went on to explore alternative explanations for the differences in wages and employment. It found that differences in the quality of educational qualifications were not an important driver in employment and wage differences. The study also found there was no systematic pattern between employment probabilities across different groups and perceptions of discrimination. In addition, the study found little evidence that the relatively low employment rates among British-born ethnic minority females are the result of labour market discouragement.

Population projections suggest that by 2009 the number of working-aged ethnic minority immigrants and their descendents will rise to 7.9 per cent of the UK population. Projections suggest that most British-born ethnic minorities will spend their entire lives in Britain rather than their country of ethnic origin. Yet, most of the existing research on the economic performance of immigrants in Britain focuses only on the first generation.

Professor Christian Dustmann, Director of CReAM, who led the study, says: "It is not possible to extrapolate from the data why many British-born ethnic minority groups have lower employment rates and earn less than their white peers with the same education and regional allocation. Providing the right incentives to participate in the labour market for some ethnic minority groups may be an appropriate policy response. More research in this area is needed to better understand the differences our study reveals."

The Working Paper 'Ethnic Minority Immigrants and their Children in Britain' is published on the UCL website on Monday 23 October 2006

The Centre for Research and Analysis of Migration (CReAM) is an independent interdisciplinary research centre located in the UCL Department of Economics. CReAM's research focuses on the causes, patterns, and consequences of international population mobility and movements affecting the UK and Europe and on associated global processes. CReAM aims to inform public debate on migration in the UK and in Europe by providing new insights, helping to steer the current policy debate in a direction that is based on carefully researched evidence without partisan bias. CReAM contributes to the development of new theories, and methodological advances in data analysis, ensuring the ability to contribute and inform on a wide range of issues of policy concern, and establishing a reputation for analyses that are accepted as open, transparent and reliable. Research conducted within the centre is both theoretical and empirical. Although emphasis is on quantitative research, CReAM explores new and interdisciplinary approaches in analysis of the migration cycle.